CITY A.M. | SHADOW MPC

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ALLISTER HEATH | CITY A.M.
“Rates should be raised by 25 basis points as a symbolic hike to show that the MPC is serious about targeting inflation. The economy is growing, albeit slowly, with yesterday’s factory stats further evidence that we won’t suffer a double-dip recession.”

SIMON WARD | HENDERSON
“Raise by 25 basis points. Policy normalisation should proceed barring renewed money supply weakness. Nominal GDP growth of six per cent over the last year is further evidence that the current stance is too loose.”

MICHAEL SAUNDERS | CITIGROUP
“The MPC will stay on hold and not extend quantitative easing. It really is not a close call. Given the Inflation Report forecasts, the MPC will not extend QE unless the economy weakens markedly.”

JAMIE DANNHAUSER | LOMBARD STREET
“Business surveys suggest third-quarter output growth may be a tad weaker than we expected. Even so, there is little reason for the MPC to alter its stance at this stage. The chance of more QE over the next year remains slim in our view.”

VICKY REDWOOD | CAPITAL ECONOMICS
“With inflation still high, I’d do nothing this time. But I’d certainly consider doing more quantitative easing within the next couple of months if the economic recovery continues to show signs of faltering.”

TREVOR WILLIAMS | LLOYDS TSB
“Despite strong second-quarter growth, the recovery remains anaemic. Housing numbers are slipping and confidence is falling. The risk still seems weighted towards too weak growth. Hold with a bias to ease if the economy takes a turn for the worse.”

GEORGE BUCKLEY | DEUTSCHE BANK
“Economic news remains mixed ?– certainly not robust enough to justify a tightening. While we can’t rule out the need for further loosening, we'd recommend unchanged rates until the evidence shifts decisively one way or another.”

HOWARD ARCHER | IHS GLOBAL INSIGHT
“No change for now, but further QE may be justified soon. The weaker August PMIs suggest that a double-dip is an increasing risk, and credit conditions remain worryingly tight. Meanwhile, underlying inflation shows signs of moderating.”

GRAEME LEACH | IOD
“The MPC should announce a small expansion in quantitative easing of around £25bn together with a strong signal that a much larger extension will be undertaken if economic weakness intensifies. But in reality, it will probably hold fire for another month.”